eBay Targets International Sellers Trying to Dodge New GST Laws

Reading Time: 2 mins
By Published On: July 10, 20180 Comments

eBay has released a statement to members of the Professional eBay Sellers Alliance (PeSA), announcing its plans to crack down on sellers misrepresenting their location in an attempt to avoid Australia’s new online goods tax.

The online marketplace has told PeSA members that any sellers misrepresenting item locations to avoid the new GST laws will be identified, and possibly removed from the platform.

eBay has deployed technology that identifies disparities between item location and the actual shipped from location. As a result, we have a list of sellers, which is updated weekly, who are being contacted and told to change their item location.

“These sellers have been warned we will not tolerate item location misrepresentation and a clear consequence path has been outlined. Sellers that fail to comply may be removed from the platform,” the company said in a statement to PeSA members.

According to the e-commerce giant’s updated guidelines, consumers will pay an extra 10 percent for items worth less than $1,000 that are being shipped from an international seller to an Australian address. This extra cost will reportedly appear automatically when the buyer proceeds to the checkout.

“Starting 1 July 2018, we will be collecting Goods and Services Tax (GST) from buyers on all imports with an order value of less than 1,000 AUD. Sellers don’t need to do anything,” the company’s updated policy reads.

“If you have products located outside Australia, your prices may appear 10 percent higher to buyers than before if their ship-to location delivery address is in Australia.”

Regardless of whether an item is being shipped to an Australian residential address or a local distribution centre, eBay says it will be collecting GST at the point of sale.

In a bid to stay compliant with the government’s new GST laws, eBay will also be investigating any reports from the Australian Taxation Office (ATO) against alleged item location misrepresentations. Sellers who are found to be lying about an item location could face penalties by both the ATO and eBay, with the marketplace threatening to ban offenders.

According to Tim Davies, the online retail strategist and eBay specialist at Zellis, it’s not uncommon for international sellers to claim products ship from Australia when they’re actually being dispatched from China or Hong Kong.

“Another variation of this item location misrepresentation by foreign sellers is where they pick and pack the orders outside Australia, put a legitimate Australia Post label on each consignment, and then freight-forward the entire manifest shipment to a distribution centre in Australia where the individual parcels are then dispatched to the customer,” he says.

While there’s nothing illegal about freight forwarding, Davies says it does spark concerns about rogue sellers evading tax, as eBay doesn’t collect tax on items that are advertised as shipping locally, and Australian Customs isn’t currently collecting tax at the border.

Last year, the Australian government passed the GST Low Value Goods Bill 2017. Under the new legislation, international sellers are required to collect a 10 percent tax on all goods worth less than $1,000 that are shipped to Australia.

While some global e-commerce businesses like Amazon have found ways around the tax at the expense of consumer choice, eBay has chosen to remain compliant.

Never miss our best stories. Sign up for Power Retail’s free weekly newsletter and find our daily stories on FacebookTwitter, LinkedIn, and Instagram.

About the Author: Power Retail

Share this story!

Leave A Comment